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Presenting All The US Debt That's Fit To Monetize

Tyler Durden's picture


Over the past 4 years the Fed's strategy in response to the Second Great Depression has been a simple one: purchase record (and now open-ended) amounts of fixed income product (offset by releasing record amounts of reserves in the banking universe which in turn has converted every bank into a TBTF and Fed-backstopped hedge fund, as the concurrently shrinking Net Interest Margin no longer leads to the required ROA from legacy bank lending) to stabilize the bond market, and to crush yields in hopes of forcing every uninvested dollar to scramble for equities, primarily of the dividend paying kind now that dividend income is the only "fixed income" available.

So far the strategy has failed for the simple reason that the smart money instead of being "herded", has far more simply decided to just front-run the Fed thus generating risk-free returns, while the "dumb money", tired of the HFT and Fed-manipulated, and utterly broken casino market, has simply allocated residual capital either into deposits (M2 just hit a new all time record of $10.2 trillion) or into "return of capital" products such as taxable and non-taxable bonds. Alas none of the above means that the Fed will ever stop from the "strategy" it undertook nearly 4 years ago to the day with QE1 (as any change to a "strategy" of releasing up to $85 billion in flow per month will be immediately perceived as implicit tightening and crash the stock market). Instead, it will continue doing more of the same until the bitter end. But how much more is there? To answer this question, below we present the entire universe of marketable US debt, in one simple chart showing the average yield by product type on the Y-axis, and the total debt notional on the X.

The Fed, with the recent advent of QEternity, aka the incorrectly named 'QE 3',  is already engaged in the monetization of virtually everything to the right of Municipal debt (under the blue arrow in chart below). The reason why the Fed needs to continue buying up Treasurys in the 10Y+ interval is simple - in doing so it is funding the long-end of US deficit spending, aka everything that has a greater than zero duration in the age of ZIRP. However, that amount is merely enough to keep the status quo as is, in other words to keep the deficit government funded. Remember that the Fed's ultimate goal is to inflate the debt stock of both the US and the world. Which means that not even QEternity will be enough. It also means that very soon the Fed will be forced to shift its monetization appetite further to the left of the X-axis, and increasing buy up more and more higher yielding fixed income product, in a rerun of Japan, which the US has now become. Recall that the BOJ is also openly monetizing Corporate debt, as well as various equity-linked products.

Said otherwise, the "smart money" is now loading up on those debt products, IG and HY debt, munis and non-agency MBS, which the Fed will sooner or later become the buyer of first, last and only resort. And just like Bill Gross was buying up MBS on record margin in February (as we showed) in advance of QE3, so now everyone else is once again merely preparing for the inevitable next step, as the Fed proceeds to monopolize the entire marketable debt universe.

Sadly for the Fed this also means that any incremental free money will simply continue to chase more fixed income product before the Fed starts buying it (thus providing an easy bid to sell into), instead of buying up already ridiculously overpriced equities (where record profit margins are about to slam into the immovable walls of soaring input and commodity costs crushing the "cheap" P/E illusion), which in turn will force Bernanke to one day in the near future, go full Japanese retard, and announce the Fed will as a matter of policy, as opposed to simply via the PPT and Citadel in times of desperation, commence buying equities. But that's a story for another day.


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Sat, 10/20/2012 - 18:46 | 2906995 lolmao500
lolmao500's picture

Let's make sure all yields cratter so that pension funds are forced to invest in the stock market so that the HFT can rob more money from people! Great idea!

In other news... Obama pulls his October Surprise...

The United States and Iran have agreed for the first time to one-on-one negotiations over Iran’s nuclear program, according to Obama administration officials

Sat, 10/20/2012 - 18:58 | 2907015 max2205
max2205's picture

Don't mean shit to the cell phone voters

Oil crashes Monday?

Sat, 10/20/2012 - 19:24 | 2907048 vast-dom
vast-dom's picture

OT: The Miscreant’ Global Bust-Out Mark Mitchell -- 21 CHAPTERS NOW GOING UP:


Enjoy. And thanks to Wouter.

Sat, 10/20/2012 - 20:10 | 2907105 vast-dom
vast-dom's picture

pdf up now.

Sat, 10/20/2012 - 21:38 | 2907190 DoChenRollingBearing
DoChenRollingBearing's picture

R.I.P. the personal computer?  Hmm..

"Review of Barron's -- Dated 22 October 2012":



vast-dom, your blog article looks very interesting, I will try to read it tonight!  + 1!

Sun, 10/21/2012 - 00:02 | 2907292 Manthong
Manthong's picture

..can't seem to find the PDF version.


Sun, 10/21/2012 - 00:50 | 2907348 LouisDega
LouisDega's picture

Dude, I got a Dell. The Xps 8500 is alive and well


Sun, 10/21/2012 - 04:05 | 2907443 vast-dom
vast-dom's picture

here is an excerpt from the postings -- and this is just the tip of the iceburg in how Madoff, the SEC, the Russian Mob/Gov and the Iranians (who happened to work closely with all parties) colluded to crash the markets in 2008:


"The SEC rule prohibiting others to short sell on a downtick (which was scrapped entirely, at the behest of Madoff and others in his network, right at the inopportune moment in 2007 when the markets had begun to weaken) was meant to prevent traders from inducing death spirals and crashing the markets. But thanks to “The Madoff Exemption”, the clients of Madoff could induce death spirals without a word from the SEC.

Madoff also helped write the SEC rule that allowed market makers, such as Madoff, to engage in naked short selling so long as the purpose was to maintain “liquidity” in the markets, and so long as real stock was eventually delivered. Given that Madoff was, after all, a criminal of monumental proportions, it boggles the mind that neither the SEC nor the media ask whether Madoff might have “rented out” his market making exemption to hedge funds wishing to use naked short selling to drive down the markets.

It is more than likely that Madoff not only rented out his exemption, but abused it, never “clearing”, or delivering the stock he had “temporarily” sold naked.

The fact that Madoff actually helped write the SEC rules governing short selling (rules that contained precisely the sort of loopholes that would allow miscreant traders to crash the markets) should give you a sense of just what sort of agency the SEC was in 2008. In fact, the utter failure of the SEC and the all-important Depository Trust and Clearing Corporation, or DTTC, to prevent naked short selling caught the attention of the people who were hired by the Defense Department Irregular Warfare Support program to analyze the causes of the 2008 financial crisis.

The report that was produced for the Defense Department (the same report I cited at the outset of this story) states that there is a possibility that the SEC and the DTTC (a self-regulating body responsible for ensuring settlement of short sales and other transactions) were compromised by organized crime or even foreign enemies of the state. The report concludes: “Implications that these parties [the SEC, the DTTC, and other Wall Street institutions] have been complicit [in acts of financial terrorism] or otherwise co-opted cannot be ruled out.”

That statement is not preposterous. Bernard Madoff was not the only suspect character roaming the halls of the nation’s regulatory bodies. We have seen that Sheikh DeLorenzo (he with the Al Qaeda partner linked to the military spy scandal) also received favorable treatment from the SEC, which allowed him to set up Al Safi Trust’s naked short selling machine in 2007. And as we will see, there were still other, equally dangerous people who “captured” officials at both the DTTC and the SEC.


* * * * * * * * *

Given the people whom Bernard Madoff serviced, it is clear that he was not just a monumental criminal, he was also a threat to national security. Consider that he had just a few other key “feeders” who profited from his scam, one of whom was the Abu Dhabi royal family, another of whom was Al Qaeda Golden Chain member Sheikh Mahfouz. The Abu Dhabi royals and Sheikh Mahfouz, of course, came to be on close terms with Madoff and his network when they were perpetrating the BCCI criminal enterprise."


Now to bring this on topic let's speculate how the banks can so easily leverage The Fed and DC by blackmailing mob-style with taking down the entire global economy if they are not supported in their ponzi operations.

Pump, Drain (naked short sell) and Dump is profits to the Nth, then get the blood QE transfusion and repeat. Legalized loan sharking just helps line up the victims and get them into their houses = loans / MBS = sucked up by The Fed. Now look above at that Monetized by The Fed line and take into account Tyler's The Fed will "commence buying equities" and we can see how the real "legit" financial terrorists are leveraging Bernank et. al. to support the criminal enterprises (e.g. housing, Russian, Iranian, Cartel money laundering, Madoff style ponzi with same Russians, Iranians and drug dealers, etc etc etc [the only difference in Russia and China is that there is less pretense as to the seperation of finance and gov / crime and law, or lack thereof]).


So blatent and in clear sight that it is not even seen a la the Poe classic The Purloined Letter. More upcoming.

Sun, 10/21/2012 - 08:42 | 2907535 GetZeeGold
GetZeeGold's picture



Oil crashes Monday?


Hope so...I need to put some gas in the truck. Have you seen how expensive that crap is.

Sat, 10/20/2012 - 19:48 | 2907075 BurningFuld
BurningFuld's picture

One thing Iran does not want is Mittens in charge. They as well as I have determined he may be unstable. (?)

Sun, 10/21/2012 - 01:15 | 2907370 sessinpo
sessinpo's picture

Kind of silly. Iran doesn't want  anyone in charge except Iran. Ironically, that applies to every nation. They don't want anyone in charge but themselves. Kind of self evident.

Sun, 10/21/2012 - 02:11 | 2907411 helping_friendl...
helping_friendly_book's picture

Makes sense that Iranians would want self determination over Iran.

Sounds reasonable to me.

The USA supplied Saddam Hussein with unlimited arms to attack Iran and wage an, unprovoked, war of aggression for eight years. 

A whole generation of Iran was sacrificed to save Iran from invasion by USA proxy. 

I think it is the USA who owes an apology and beg forgiveness from Iran. The USA has been attacking Iran since 1952. Iran is well withing their right to defend their sovereignty against the savagery of the USA. 

Stupid American dimwits have some nerve afflicted with diarrhea of the mouth and complete ignorance of their own history and the actions of this continually criminal regime.

TPTB are so frustrated that the President will not wage their unholy, evil wars against innocent women and children.

Even the Pentagon is revolting against the US warmongers. The Jew intelligentsia has lost their grip on the throat of the machine and they can see their own demise as the internet leads us to the true conclusion that our Gov't are traitors to the Constitution.

Protect and serve themselves. They wipe their ass with the Constitution with their paramilitary and free speech zones and banking cartels.

Their are many Zionist trolls  here. Learn to spot them and end their terror.

Sun, 10/21/2012 - 03:04 | 2907433 1fortheroad
1fortheroad's picture

Spot on.



Sun, 10/21/2012 - 01:20 | 2907375 AGuy
AGuy's picture

What about Syria? Iran's long time Ally? Obama is destabilzing Syrian by supporting Syrian Rebels, I don't see how Iran would favor Obama over Mittens. In by opinion I see little difference between Mittens and Obama, mere two sides of the same coin.

I am leaning towards the belief that HyperInflation is turning painful in Iran. Iran may be weeks or months away before major riots and a civil war occurs. I doubt this will help the West or Israel since Iran's gov't is likely to just be replaced by an even more radical gov't, perhaps armed with Nukes and willing to use them, even if it means severe loss of life of thier own (Iranian) people, perhaps under the belief that God will prevent them from losing or some other bizarre religious fanatical fantasy.

If my assumptions are correct, than Iran is becoming desperate and is reaching out (Talks with the US) in order to save itself before a civial war begins in Iran.

Sat, 10/20/2012 - 19:27 | 2907050 flacon
flacon's picture

Judging by the URL that is tomorrow's news today. 




"A version of this article appeared in print on October 21, 2012, on page A1 of the National edition with the headline: U.S. Officials Say Iran Has Agreed To Nuclear Talks."

Sat, 10/20/2012 - 19:36 | 2907061 Tyler Durden
Tyler Durden's picture

Just another instance of the NYT getting everything completely wrong. At least according to the administration:

Statement by NSC Spokesman Tommy Vietor on Iran


It’s not true that the United States and Iran have agreed to one-on-one talks or any meeting after the American elections. We continue to work with the P-5 on a diplomatic solution and have said from the outset that we would be prepared to meet bilaterally. The President has made clear that he will prevent Iran from getting a nuclear weapon, and we will do what we must to achieve that. It has always been our goal for sanctions to pressure Iran to come in line with its obligations. The onus is on the Iranians to do so, otherwise they will continue to face crippling sanctions and increased pressure.

Sat, 10/20/2012 - 19:46 | 2907073 lolmao500
lolmao500's picture

Thanks for the follow up Tyler!

Sat, 10/20/2012 - 20:11 | 2907108 francis_sawyer
francis_sawyer's picture

The fucking ONUS should be on the Apartheid State of Israel to become a signatory to the Nuclear Non-Proliferation Treaty... Until then ~ this is all fucking bullshit...

Sun, 10/21/2012 - 01:51 | 2907402 helping_friendl...
helping_friendly_book's picture

The occupied State of Palestine aka Israel.

Their real homeland is Krakow.

Just theifs and Stern gang criminals. Polacks go home.


Sun, 10/21/2012 - 10:18 | 2907612 Stuck on Zero
Stuck on Zero's picture

Dang.  The President wanted that bogus news leaked on November 5th.


Sat, 10/20/2012 - 20:12 | 2907113 Silver Bug
Silver Bug's picture

QE to infinity is the only solution they know.


Peter Schiff Blog

Sat, 10/20/2012 - 23:27 | 2907265 Backspin
Backspin's picture

The rarely discussed fact is that they can't really pay off the debt by monetizing it.  They are not printing money and then using that money to pay off the treasury bonds.  They are printing money and using that money to buy more bonds, thereby increasing the debt.

The way the system currently works, they can't actually pay off the debt by printing money.  They only increase the debt.

y = e^x, bitchez.


Sun, 10/21/2012 - 01:40 | 2907395 bunnyswanson
bunnyswanson's picture

The plan is to achieve three main goals. First, give privatizers the right to turn public infrastructure into tollbooth opportunities. The idea is to force cities to balance budgets by leasing or selling off their roads and bus systems, schools and prisons, real estate and other natural monopolies. In the process, this promises to create a new market for banks: lending to vulture investors to buy rights to install tollbooths on the economy’s basic infrastructure.


Elected public officials could not engage in such predatory and anti-labor policies. Only the “magic of the marketplace” can break public labor unions, downsize public services and put tollbooths on the roads, water and sewer systems while cutting back bus lines and raising fares.


To achieve this financial plan, it is necessary to frame the problem in a way that rules out less anti-social alternatives.


As Margaret Thatcher put matters, TINA: There Is No Alternative to selling off public transportation, real estate, and even school systems and jails.

Sun, 10/21/2012 - 02:34 | 2907423 helping_friendl...
helping_friendly_book's picture

Thanks! You just gave me new nightmares. My people have a 225 acre farm between two mountains. No toll roads there. Just have to ditch my real estate first to get from under the real estate trap.

Sat, 10/20/2012 - 22:23 | 2907214 spankthebernank
spankthebernank's picture
The following is what po' dunk retarded sheep think of Ben Bernanke.  A column in a local paper, by a local money manager no less! By October 14, 2012 

Poor Ben Bernanke. He doesn't get any respect.

Much of Congress blames the Federal Reserve chairman's policies at least in part for the economic meltdown of 2008 and 2009. But Bernanke had little to do with the root causes of the economic crisis.

Congress also berates him for current policies, while they've done almost nothing to fix fiscal policy or the tax code. And that's what really needs to be done now. Bernanke's Fed has already been forced by Congress's inaction to use more monetary policy ammunition to fix the economy than it should have had to.

Tellingly, even as the country edges closer to the edge of the looming Dec. 31 fiscal cliff, Congress has closed up shop, and left town to try and get re-elected. They should be embarrassed to be criticizing the Fed.

A lot of economists pan the Bernanke Fed's easy money policies too. But as a group, those economists have managed to predict five of the last three recessions, with an equally bad track record for predicting recoveries.

Presidential candidate Mitt Romney has threatened to replace Bernanke. And Barack Obama is noncommittal, although he has already reappointed Bernanke once.

The truth is that a lot of the too-easy monetary policy and lax oversight of financial markets that contributed to the economic collapse were the work of Bernanke's predecessor, Alan Greenspan. In contrast, Bernanke, while rightfully needing to maintain low interest rates in the face of the economic meltdown and a painfully slow recovery, has played a major role in undoing the relaxed regulatory oversight of the Greenspan Fed.

A Republican, the former Princeton economics professor was first appointed Fed chairman by George W. Bush in 2006. But by then a lot of the groundwork for the economic implosion that commenced in late 2007 had already been laid. Bernanke was reappointed by Obama in 2010. He comes up for reappointment again in January, 2014.

Alan Greenspan was largely viewed as being able to walk on water for almost all of his Fed chairmanship tenure. But he fell out of favor after leaving office, finally admitting that some of his easy-money policy and laissez-faire regulatory stance contributed to the crisis.

To be fair, there's plenty of blame to go around, especially to unscrupulous mortgage brokers and financial institutions that relaxed credit standards, or even forged borrower credit qualifications. Borrowers who undertook more debt than they could repay are also culpable. And political policy out of Washington prior to the meltdown didn't help.

But Ben Bernanke played little role in precipitating the crisis. He largely inherited an already inflated real estate and debt bubble that was about to burst.

Significantly, once the bubble did burst during 2008 and 2009, he played a pivotal part in pulling the U.S. back from the edge of the economic abyss. He worked with the outgoing Bush administration and Obama's incoming Treasury Secretary Tim Geithner to put together a set of policies and situational determinations that, among other things, resulted in saving our auto and banking industries. He was a calm hand at the helm, who helped re-instill confidence in badly shaken markets.

Yes, a lot of decisions were made on the fly, as debacle followed debacle in rapid succession almost daily during the height of the crisis. And a lot of the response was guesswork.

Inevitably, some decisions didn't work out so well, like allowing Lehman Bros. and Bear Stearns to fail. But most succeeded, for example keeping American International Group and General Motors in business. The jury is still out on some, like Fannie Mae and Freddie Mac.

But only the benefit of hindsight some years from now will determine how smart the various fixes were. All of those decisions, including the overall Troubled Asset Relief Program and assorted stimulus initiatives, will be debated in economics classrooms for a long time.

But whether you like any of the decisions or not, the result is a slow, halting economic recovery that's taking hold, maybe even gaining momentum. And Ben Bernanke helped make that happen.

His departure any time soon would shake the confidence of consumers, businesses and investors. And it would likely roil the markets yet again.


Sun, 10/21/2012 - 06:59 | 2907491 mercy
mercy's picture

I almost vomitted after reading this. Disgusting!

Sun, 10/21/2012 - 12:45 | 2907837 earleflorida
earleflorida's picture

are you or are you not defending an ambiguous tenor's adjunct muff ?   green-lighting the chairsatan himself... through a cunning, deceptive and circumlocution scripted 'freudian slip-rant via naivete... repose'd upon pure-puerile courant!

KISS thy hand of reason, and bathe no more in thy winter's folly of errand`fool's reveling in sardonic song?

'Ben Bernanke, Who Missed an $8 Trillion Housing Bubble, Warned About the Deficit' 

Sun, 10/21/2012 - 08:18 | 2907515 evolutionx
evolutionx's picture


A deluge of an unprecedented magnitude is both inevitable and imminent. The consequences of the economic and political mismanagement will have a devastating impact on the world for a very long time. And the consequences will touch most corners of the world in so many different areas; economic, financial, social, political and geopolitical.

Sat, 10/20/2012 - 20:10 | 2907103 TrillionDollarBoner
TrillionDollarBoner's picture

bad link

Sat, 10/20/2012 - 18:57 | 2907011 Deathrips
Deathrips's picture

Hows London Looking Today.......? They might beat us to it.

Fuck You Bernanke!

Sat, 10/20/2012 - 18:58 | 2907014 max2205
max2205's picture

And that's where it ends. Sadly

Sat, 10/20/2012 - 19:11 | 2907022 devo
devo's picture

I think there's going to be a (Wall St) engineered crash to get Romney in the White House and repeal DF. This "crisis" will give them a catalyst to monetize everything (for the good of the people, of course) until the next election. Rinse, repeat.

Sun, 10/21/2012 - 01:45 | 2907399 helping_friendl...
helping_friendly_book's picture

That's my wet dream! I have been sitting on SPXU forever waiting for the collapse. 1931 style.

 The Dow will bottom out at a Depression-era low of just 41.22 in 1932.

1930 Unemployment in 1930 at 8.9%

Unemployment averages 8.9% for the year.

Jun 17, 1930 Smoot-Hawley Tariff

Congress passes the Smoot-Hawley Tariff, steeply raising import duties in an attempt to protect American manufactures from foreign competition. The tariff increase has little impact on the American economy, but plunges Europe farther into crisis.

1931 Unemployment in 1931 at 16.3%

Unemployment averages 16.3% for the year.

Nov 1931 Major Bank Collapse

New York's Bank of the United States collapses in the largest bank failure to date in American history.[M31] $200 million in deposits disappear, and the bank's customers are left holding the bag.

1932 Unemployment in 1932 at 24.1%

Unemployment averages 24.1% for the year.

Sat, 10/20/2012 - 19:06 | 2907024 DowTheorist
DowTheorist's picture

Well eventually this will not escape to gold...Which gold?, since not all gold is created equal


Here are some ideas to help the investor clarify his ideas, time frames and gold "flavors" in which to invest:

Sat, 10/20/2012 - 19:10 | 2907026 Spitzer
Spitzer's picture
3 of the 4 Richest Countries in the world have no minimum wage laws


Who would have thought ?



Sun, 10/21/2012 - 00:49 | 2907349 GoinFawr
GoinFawr's picture

Thank you. Now I have you on record defining Norway as a free market economy.

No wonder you kept that blurp so short, the slightest scratch and its insipid 'conclusion' falls apart faster than a pair of Chinese workboots.

Sun, 10/21/2012 - 19:18 | 2908493 Spitzer
Spitzer's picture

It can be debated how much unions are an arm of the government but the botton line is, there is no minimum wage by decree.

Norway is is a mix of socialism and fical conservatism.

Tue, 10/23/2012 - 23:39 | 2908946 GoinFawr
GoinFawr's picture

You'd better rewrite that whole entry then.

 But I agree, according to the national balance sheet and SWF the Unionized Gov't International Oil business is certainly pulling its own weight and then some in Norway. Capitalism too 

I see the second 'richest' in your selection has a stunning min. wage.

Sat, 10/20/2012 - 19:45 | 2907027 Yen Cross
Yen Cross's picture

So basically, the Fed. is running a 10 year LTRO?  I can't wait to see who front runs that idea!

  Aliens do exist, and Asteriods are made of (XAU)<>

  Make no mistake Tyler.  Japan emulated the United States< with the " marshal plan", post ww2.   Then Japan got intoxicated with leverage in the 80's and 90's.

   The United States knows perfectly well, what lost generations look like. The United States thinks they can "resource" their way out of this. Japan is using it's "short lived" strong yen to print and buy abroad. How is Japan going to service that debt( 200+% of gdp), with a weaker currency? Japan is going straight down the shitter!

  Japan will set precedent, for "hyperinflation" exit/tightening strategies. and piss off KAMPO in the process.

Sat, 10/20/2012 - 19:27 | 2907030 blindman
blindman's picture

japan had the fed. who does the fed have?
f that. there be combustibles here ..
.."The atmosphere of Titan is largely composed of nitrogen; minor components lead to the formation of methane and ethane clouds and nitrogen-rich organic smog. The climate—including wind and rain—creates surface features similar to those of Earth, such as dunes, rivers, lakes and seas (probably of liquid methane and ethane), and deltas, and is dominated by seasonal weather patterns as on Earth. With its liquids (both surface and subsurface) and robust nitrogen atmosphere, Titan's methane cycle is viewed as an analog to Earth's water cycle, although at a much lower temperature." ....
and so there ya' go. combustibles there and alcohol
here, what a deal. someone can collateralize that?
and just when we shut down our space program.
thinking beyond global to the solar systemic and ...

Sat, 10/20/2012 - 19:15 | 2907033 lolmao500
lolmao500's picture


Exclusive: Pioneering scientists turn fresh air into petrol in massive boost in fight against energy crisis

"We've taken carbon dioxide from air and hydrogen from water and turned these elements into petrol," said Peter Harrison, the company's chief executive, who revealed the breakthrough at a conference at the Institution of Mechanical Engineers in London.

Sat, 10/20/2012 - 20:11 | 2907109 HappyCamper
HappyCamper's picture

The good news is that they made 5 liters of petro out of thin air. The bad news is that it took them the equivalent of 15 liters of  petro energy to actually make the stuff. Nevertheless, it should be good for at least a $500 million grant from the Obama administration, in return for lavish campaign contributions, of course.

Sat, 10/20/2012 - 20:46 | 2907140 DeadFred
DeadFred's picture

Entropy is a bitch. They should outlaw it.

Sat, 10/20/2012 - 20:17 | 2907117 Terminus C
Terminus C's picture

That's nothing... I just invented a cold fusion driven, perpetual motion machine. All I need to bring it to market is $100 billion.

Oh, and the island of Santorini, where I will build my... uh... production facilities.

Sat, 10/20/2012 - 19:15 | 2907035 disabledvet
disabledvet's picture

let is dispense with the term "smart money" shall we? after Groupon and Facebomb i think "the smart money" has pretty much retreated for the time being. How about we just call..."money" in "the money" and "no, the government doesn't have any but that guy does" kinda money...yes, yes? First off this is a FIRST RATE article...but to think the "Fed will now proceed to monetize everything" when its balance sheet has stayed pretty much stable going on 18 months now (even though the NATURE and COMPOSITION of the balance sheet has certainly changed a lot) i think is just not true whoever wins the next election. Inflation to me is easily created: DO NOTHING...and the economy by dint of massive ongoing Federal stimulus, zero percent financing of everything, a cyclical albeit anemic recovery and continued advantages vis a vis terms of trade (USA already a net energy exporter for example) and i think you'll see "the long hard slog" proceed. I do NOT believe the next Administration will make deficit reduction it's number one priority but "the War thingy." I also think a "Final Solution" to the energy nightmare that the West has been dealing with going on 5 or 6 decades now will be a priority. We shall see on that one of course (cough, cough...General Electric...cough, cough.) And of course the continued build out of the web-based media landscape is a HUGE deal...with hopefully media properties such as Zero Hedge...and all the commentariat here "boldly going where no commentarian has gone before!" included in the payout regimine. we shall see on that score too. i also think State and local governments are in for a Great Awakening as the MASSIVE expense of the baby boomers who have now exited "stage right" (or left...we shall see come election day) become quite the burden. WHAT AN EXIT THO! WHAT ANNNNN EXIT! don't sell short a recovery people when the folks telling you to refuse to present any ACTUAL EVENTS OR NUMBERS to back up their claims. Not saying i'm right...or that they're wrong btw. But you all know EXACTLY where i'm coming from because i've been saying the same thing over and over again. Of course "BY ALL MEANS SUBSTITUTE MY JUDGEMENT FOR YOURS" when it comes to your money...but in the meantime...

Sat, 10/20/2012 - 19:20 | 2907040 disabledvet
disabledvet's picture

oh, and...just in case you all were wondering:

Sat, 10/20/2012 - 19:40 | 2907063 Tyler Durden
Tyler Durden's picture

Apparently, you, like Paul Krugman, have no idea that while notional has been flat, duration (10 year equivalence) is soaring as shown here most recently. Another word for duration is inflation risk. Which by the way in ZIRP through 2015, is all that matters.

Sat, 10/20/2012 - 20:09 | 2907102 ParkAveFlasher
ParkAveFlasher's picture

This Tyler ^^^ is totally an Englishman.

Keep up the good fight, fellas.  You have forces fighting for themselves in tiny cells across the world.  Like WWF intercontinental champion Tito Santana used to say, "Arriba!"

Sat, 10/20/2012 - 20:50 | 2907144 Never One Roach
Never One Roach's picture

Great charts showing the breakdown of Fed holdings---duration. I wonder how defined benefit pensions and municipalities are going to meet all their obligations in the coming decade given the 0% to 3% returns when they base their calculatuions on 8% return.

Sun, 10/21/2012 - 00:33 | 2907332 Heyoka Bianco
Heyoka Bianco's picture

Never One Roach - You don't really wonder about that, do you?

disabledvet -

Sat, 10/20/2012 - 21:35 | 2907189 agrotera
agrotera's picture

Operation twist (trading out of shorter and into longer duration securities) was a duck and cover by the privately owned Federal Reserve Corp since they willl effectively lose ALL influence in the market when we get 15% short term rates...not today, but sometime in the near future unless Ron Paul gets on steroids and starts donning an IRONMAN suit and saves us all!

Sun, 10/21/2012 - 01:34 | 2907393 helping_friendl...
helping_friendly_book's picture

Saving in reminbi denominated account and cash waiting for short term treasury rate to go ballistic. I wasn't prepared in the 1980's, I was only 20, I am now. I paid 15% on my first real estate deal in the 80's. It will be again.

Your cash might be hit by inflation in the short run but, when rates go to 25% APR I will put the cash in 10 year Treasury Bonds paying butter interest rates. When Treasury rates go ballistic money will flow from PM and stocks into T-bonds.


Don't get sucked in to a trap and miss the golden opportunity when the FRBNY starts soaking up all the liquidity and rates skyrocket.

It will happen. Don't buy the lie. SnP will death spiral. Benanke is hypnotizing you so you won't have cash when he doubles rates each FOMC meeting.

Just a matter of time.



Sun, 10/21/2012 - 02:11 | 2907410 Cosimo de Medici
Cosimo de Medici's picture

Look at all the good things Twist does:

---allows Chinese and Japanese to shorten duration and essentially liquidate their dollar exposure, so that eventually they can promote the end of the dollar as reserve currency

---endangers pensions and insurance companies alike by destroying contractual long term yield;  payouts fall for one, premiums rise on the other

---frees up cash to use speculating in oil and other commodities, further exacerbating the economic decline

---allows Geithner and Congress to pretend the deficit is sustainable

---guarantees on-going and long term monetization of the Federal deficit

---increases spreads on LT USTs by absorbing an ever-increasing portion of the float

---pumps up Wall Street bonuses by lowering the term rate when a long term deal's supposed cash flow is NPV'd and its "profit" calculated

What's not to like?

Sat, 10/20/2012 - 20:45 | 2907138 lasvegaspersona
lasvegaspersona's picture


that brought back the memory of going to the record store and agonizing over whether or not to spend the extra $$$ on the 'stereo version or go cheap and stick with 'mono'

if only Kaen Carpenter had shared that last sandwich with Mama Cass...they'd both be alive today...sick ...but still funny..

Sat, 10/20/2012 - 22:38 | 2907228 ekm
ekm's picture

"(USA already a net energy exporter for example)"


USA is exporting derivatives of Crude Oil. USA is NOT exporting crude oil.

Crude oil can stay stored forever without getting "rotten", whereas derivatives like gasoline etc can last only 1 year averagely before going bad.

If derivatives of crude oil are not consumed within a certain period due to extremely high prices, the only option is to export them where it can be consumed immediately.

Sat, 10/20/2012 - 19:21 | 2907043 Debeachesand Je...
Debeachesand Jerseyshores's picture

Why doean't DickHead Ben just give $100,000 to every taxpayer who filed a tax return for 2011 and let them spend the instead of the TBTF Banks redepositing the money with the Fed paying them .25% toboot.

Since the American Taxpayer is back stopping the whole shitload of debt,the Fed should cut out TBTF assholes (who are hoarding the money anyway) and give to the taxpapers,who will spend the money etc give Ben the inflation he so desperately wants.




Sat, 10/20/2012 - 19:41 | 2907065 Peter Pan
Peter Pan's picture

Ii would give you an uptick because I feel your frustration, but the reality is that your idea would be a dsaster. What woukd have better results would be to limit the paypacket of every Wall Steet cowboy to $100,000.

Sat, 10/20/2012 - 19:50 | 2907079 Debeachesand Je...
Debeachesand Jerseyshores's picture

So I assume this present clusterfuck this country is experiencing is much better? You and I know that the American Taxpayer is on the "hook" for the Feds actions and the TBTF banks are enjoying a "free lunch" at the taxpayers expense.

Sat, 10/20/2012 - 19:49 | 2907077 AndrewJackson
AndrewJackson's picture

This is actually a possibility after the Fed has purchased the entire fixed income market and a good portion of the stock market.

Sat, 10/20/2012 - 19:40 | 2907066 Yen Cross
Yen Cross's picture

Long, "Old Mattresses", stuft with cash!

Sat, 10/20/2012 - 19:52 | 2907080 ekm
ekm's picture

If you have a backyard, bury some gold in it. 3 ft deep is ok.

Long, shovels.

Sat, 10/20/2012 - 20:02 | 2907095 Yen Cross
Yen Cross's picture


Sat, 10/20/2012 - 20:39 | 2907133 TNTARG
TNTARG's picture

What for? Are you gonna eat gold?

I found it rather insane.

Sat, 10/20/2012 - 21:27 | 2907178 ekm
ekm's picture

My grandfather kept it under the ground in the backyard from 1945 until 1990 when communism collapsed.

It was still very much in demand. And  I can guarantee you that it doesn't corrode. I have 3 of those coins with Napoleon's face on it.


If anyone has any substantial amount of money, like 200k or more in cash, up to 20% should be gold burried in the backyard. There's no use of it, except for it's always in demand for some reason. It's just the way it is. For any black swan event, gold counts.

Sun, 10/21/2012 - 13:09 | 2907866 TNTARG
TNTARG's picture

Did it make your grandfather richer, happier, better?

Sun, 10/21/2012 - 13:34 | 2907908 ekm
ekm's picture

Absolutely. As soon as communism fell, gold was used to setup business inside the family.

My extended family is living quite well.

Sun, 10/21/2012 - 01:30 | 2907386 Al Gorerhythm
Al Gorerhythm's picture

You can't eat gold and if you plant it, it won't grow. Right?

You just got your first job, no?

Sun, 10/21/2012 - 08:46 | 2907536 TNTARG
TNTARG's picture

I choose to live under a different paradigm. That's all.

Sat, 10/20/2012 - 19:47 | 2907074 AndrewJackson
AndrewJackson's picture

After QE infinite was announced, I had the zerohedge lightbulb come on my head. For so long, i always thought that the death of the US was going to be Interest Rates increasing -----> Higher deficits -----> Higher Spending on Interest -----> Higher Interest Rates -----> Higher Deficits and so on and so forth until the US along with the entire developed west was crushed. Now I don't believe this to be the case. The reason being, the Fed will buy EVERYTHING! Even if the Fed allows rates to increase, it won't matter for corporations/goverments/municipalities, because the Fed will be there to roll over and issue new debt as needed. Rates don't matter when your lender has unlimited funds that never get redeemed. These consequences of these actions will be (1) high inflation moving into hyper at some point (2) The entire fixed income market is completely worthless for any meaningful information as price discovery is dictated by central banks (3) the stock market will continue to be meanigless as a risk premium barometer (4) currencies will be meaningless as central banks will inflate in cooridanted efforts to print to the bottom (5) the only real markets left on the planet will be fiat priced commodities. This is why (as many zerohedgers allready do) we should focus exclusively on commodities and real world inflation for when the SHTF will happen. These are the only honnest markets left and is consequently where the fireworks of the great reset will pan out. My opinion is that the developed countries will continue dizzyingly high deficits and central banks will cover the problem up by buying everything. Eventually their printing will lead to high inflation which will accelerate into hyperinflation. The only alternative to this outcome is that the over leveraged parties default. Given most of these are banks and governments, they will choose hyperinflation and stick the losses the entire population. Don't know what the point of this post was. Just needed to do some ranting to clear my mind of all the msm spin.

Sat, 10/20/2012 - 21:17 | 2907167 Winston Churchill
Winston Churchill's picture

John Williams @shadowstats has been warning of this scenario for a decade now.

When he first started his end date was 2022.He as revised it every year with changing

policies/inputs.Forecasting hyperinflation by the end of 2014,with or without a deflationary

collapse in between.

Sat, 10/20/2012 - 21:52 | 2907200 yogibear
yogibear's picture

There are a number of people  with some major weath that are well positioned for this. Beranke and those PhDs in the fed know exponenrts well.

Why do you think Bernanke's son holds over $400,000 in school debt. Bernanke and his wife could have easily paid it off. Bernanke knows he will inflate and decrease the amount owed through substantial  inflation.  Enough to make today's debt a fraction  in a couple of years.


Sun, 10/21/2012 - 01:18 | 2907367 helping_friendl...
helping_friendly_book's picture

You are a toady, a lacky, a shill. School debt is not dischargable, compounds so you are incurring interest on the interest if you don't pay.

Don't buy this shill's garbage which encourages you to take on debt. 



It is the latest JEW debt trap. 

Borrow money to pay for education when there are no jobs, let the interest accumulate while you are unemployed, take your social security benefits until you die, collect the principle and interest from the taxpayer when the debtor dies.

How dare you bait the Gentile to borrow from Jew scum to ruin their lives and condemn them to perpetual poverty.

Jewdi mind trick. Don't be fooled. Don't borrow undischargable debt. If you owe money for student loans, for your sake, pay it until you can borrow enough money through banks, pay the loan off and declare bankrutcy. Fuck the banks instead of your retirement.

Learn the Jew trickery to inslave you and steal your social security and collect the debt from the taxpayer after it grows 10,000% by the time you die.

Jew scumbags are buying up student loan debt as fast as the banks can loan because they will collect 100 times what you borrow on the backs of the taxpayer. 


Sun, 10/21/2012 - 02:20 | 2907414 helping_friendl...
helping_friendly_book's picture

You could retort instead of junking me troll.


Sun, 10/21/2012 - 01:33 | 2907392 AGuy
AGuy's picture

The have to keep rates low. Developed gov'ts owe too much debt to pay normal interest rates. If rates on US treasuries were normalized or permitted to float, the US would probably be forced to default in a couple of years. Printing Money simply buys time.

Lets just hope that the next great reset does cause another global war, as the last great reset did in the 1930's.

Sun, 10/21/2012 - 04:51 | 2907465 Tango in the Blight
Tango in the Blight's picture

Wars only enrich the banksters and keep their heads away from the noose as the anger of a conned population is redirected at the people of another country. Forget war let's have a revolution. Long gallows and guillotines.

Sat, 10/20/2012 - 20:12 | 2907083 blindman
blindman's picture

roughly three classes. poor, middle and the upper.
the poor spend all their money and then borrow / beg
to eat at a loss of their status and pride. the middle
spend and borrow to eat and survive in relative comfort,
the extra invested into the financial system and the
money system. the upper mostly invest in the money and financial system to increase the value of the value of
their holdings in the financial and money system.
this the predicate laid on the production and distribution ways and means.
so what? identity be forged in this furnace from
hell ! go forth young man and know death and suffering
be offered to all who enter here.
like in the garden, warning was offered to he who ate
of the tree of knowledge, expulsion from the garden
was not a punishment but a logical and systemically
configured resulting fact; as in developed consciousness
is tainted, (temporally embedded) terminal and eternal. apparently a problem in linear, bicameral delusional
conceptual construct-ions.
recently, .. i spoke to a bright young man who concluded he is moving to honduras and suggested i go with him. i
suggested that he might realize, after six months, that
the situation was no different there, really?

Sat, 10/20/2012 - 20:00 | 2907093 Duke of Con Dao
Duke of Con Dao's picture

how about some humor that involves a racist midget? 

it's cut from a scene from In Bruges...

YouTube - Black Comedy in Film: One Midget's Grand Vision of the Impending Race War

Sun, 10/21/2012 - 00:52 | 2907353 helping_friendl...
helping_friendly_book's picture

Everyone else is considered a nigger by the one percent. Welcome to the new staus quo.

Welcome to niggerdom.

Unite the races and end their reign because we are all niggers to them.

Sat, 10/20/2012 - 20:01 | 2907094 Tombstone
Tombstone's picture

What would keep the freaky FED from buying all the debt in the world?

Sat, 10/20/2012 - 20:15 | 2907111 mendigo
mendigo's picture

Definition of insanity:

68 - Nixon - Rep

72 - Nixon - Rep

76 - Carter - Dem

80 - Reagan - Rep

84 - Reagan - Rep

88 - Bush - Rep

92 - Clinton - Dem

96 - Clinton - Dem

00 - Bush - Rep

04 - Bush - Rep

08 - Obama - Dem

12 - ??? - Dem/Rep



Anyone voting Dem or Rep has either a learning disability or a vested interest - but definitely no justification to complain.

Not voting is not an answer.

Vote other - any other.

Sat, 10/20/2012 - 20:58 | 2907143 socalbeach
socalbeach's picture

Already voted for Gary Johnson with a mail-in ballot.  I heard he's a neo-con but it doesn't matter, he's not going to win.  If the 3rd party vote is greater than the margin of defeat for either Obama or Romney, it will send a message.  Not much to hang your hat on, but better than nothing, and only cost a postage stamp.

Sun, 10/21/2012 - 07:38 | 2907165 mendigo
mendigo's picture


Step in the right direction. Long Journey.


RT is sponsoring debate among 3rd party candidates on Oct 23 at 8:30.
Moderator Larry King.
No doubt some views are a bit extreme but party its simply a matter of giving other voices a chance and partly it is a matter of protest vote.
One way TPTB will attempt to undermine the process is by injecting non-serious candidates.

Sat, 10/20/2012 - 21:22 | 2907172 razorthin
razorthin's picture

He's not a neocon.  One needs to be a rabid warmonger to qualify.  Plus he hates the Fed and means it.

Sat, 10/20/2012 - 22:59 | 2907241 Savyindallas
Savyindallas's picture

No Neocon  -not as solid as Ron Paul or some other palecons like Buchanan, but he's gotten much better lately.

Sat, 10/20/2012 - 22:58 | 2907242 Savyindallas
Savyindallas's picture

No Neocon  -not as solid as Ron Paul or some other palecons like Buchanan, but he's gotten much better lately.

Sun, 10/21/2012 - 01:42 | 2907396 AGuy
AGuy's picture

"If the 3rd party vote is greater than the margin of defeat for either Obama or Romney, it will send a message."

Yeah! They need do more to suppress third parties. (aka add third party candidates to the no-fly list, tax audits, making sure they get blocked from the media and debates) You should know the drill by now.

The issue really boils down to this: Americans don't want to hear reality. They want to be lied to with promises of glorious entitlements and free medical care. Everything else is just noise.




Sun, 10/21/2012 - 04:50 | 2907464 SilverFish
SilverFish's picture

Voting for either party is a bit like being on death row and you, as well as all of the other prisoners that despise you, are given one vote each as to what your fate will be......


1. Death by lethal injection: Chance of winning 69%

2. Death by firing squad: Chance of winning 30%

3. Escaping prison: Chance of winning 1%


So, assuming you already know the odds, would you vote for anything other than option 3, just because 1 and 2 are more likely to win? Nobody would, so why do people think this way when it comes to voting for politicians?


Makes no sense to me.


Sat, 10/20/2012 - 20:19 | 2907122 Yen Cross
Yen Cross's picture

  Ben Bernankes' warmup song, (Pre) Federal Reserve policy/announcements.

Sat, 10/20/2012 - 23:38 | 2907275 blindman
blindman's picture

the candy man. oh jeez, right on man.
Jim Carrey vs. sammy davis jr.
but seriously, what a great tune.
Jerry Jeff Walker - Mr. Bojangles - Live in Oneonta, NY 1991
yup. it is just beautiful and sad, as has been said
but not heard, ongoing.

Sat, 10/20/2012 - 20:45 | 2907129 socalbeach
socalbeach's picture

The chart in this article shows avg yield on Treasuries of under 1%, but Treasury Direct shows 2.1% for marketable debt ($11.3t) as of 9-30-12. This article may be subtracting Treasuries held by the Fed ($1.7t) from that calculation, or perhaps crediting Fed interest rebates towards total interest expense. Still seems too low however.

edit: maybe the chart is using the yield on new issuance only ?

Sat, 10/20/2012 - 20:42 | 2907136 Atomizer
Atomizer's picture



Ladies & gentleman, we have arrived to our cruising altitude. We ask that you turn off all electronic devices, place your seat forward and lock your eating tray in place. We expect stagflation turbulence throughout your flight.  Thank you for flying with us… 


Federal Reserve Economic Data 

Sat, 10/20/2012 - 22:18 | 2907211 traknologist
traknologist's picture

Btw your seats aren't screwed in ;-)

Sat, 10/20/2012 - 21:23 | 2907174 whoopsing
whoopsing's picture

Seems that first they were buying time, now moving on to stopping time-can money do that ?

Sat, 10/20/2012 - 21:36 | 2907188 ekm
ekm's picture

The Fed is already purchasing stocks.

Primary Dealers cannot exist without the Fed, hence Fed + Primary Dealers are ONE ENTITY.

The only people doing FORCED purchasing of stocks are primary dealers, hence in practice, Fed owns whatever Primary Dealers have in their inventory.


I do not think Fed will ever hold stock inventory, because Primary Dealers would have to fire people and fold, hence unemployment increase.

However, if americans decide on Nov 06 to go ahead with CUBANIZATION initiated by Obama and re-vote in Obama, I do not exclude Obama ordering the Fed to buy up all means of production. We used to call it Communism in eastern europe.


Sat, 10/20/2012 - 22:29 | 2907192 earleflorida
earleflorida's picture

what! i say what... is this great [hubris be damn'd[ [where there's a way there's a will?] 'george will' dare doing and abruptly saying aloud... shouting in mitten's ear, the goings-on for 'the`mitts' best-pick of the'latter day litter',... by humbly replacing the bernank for what? i say, i say... it ain't so?!

alas, is also 'mitts' commitment[al] in the next/last debate to throw-up this long overdue, and backdated 'pos' dual-mandate stuffed-unicorn in the ledger-lap of the 'bls' coal-bin alumni-inc! 

king george is masturbating verbally his political`will' with very unusual wapo smoke [insert laughter here] signals?  this lambasting of a divinity is so,...oh, sanctimonious... as the the federal reserve would inexorably concur.  steadfast as we go mate,... stumping and tongue polishing... whilst  promoting 'dick [mr. know-it-all] fisher'? the chosen one... the apostles 'job'... well done? 

is georgie porgy on a fishing expedition for the trillionaire's club,... this rag-tag thread of blue-blood aristocracy?

then... without taking a breath, he spares not his culminating, yet quivering fodder load on the humphrey-hawkins bill,... whence it belongs in schumer's court... your chucky's fate,... your harry's curse'd snake, along with his gun-control amendment...! dye thee!?

or, has mr. 'mouth of marbles' been wapoon'd? ironically, and unknowingly,'hoisted with ones own petard'?

to be cont.

oh the horror!!!

Sat, 10/20/2012 - 22:33 | 2907220 Insideher Trading
Insideher Trading's picture

There is so much fucking money out there my head is spinning.

There is so much fucking debt out there my head is spinning.

Pin a map of investment ideas onto the wall:

place forehead on baseball bat; spin for 1 minute clockwise; drink a beer; throw a dart best you can.

Have conviction in your decision. works, it's science.

Sat, 10/20/2012 - 22:37 | 2907227 Atomizer
Atomizer's picture

Let's just audit the FED, so you don't physically abuse yourself.  ;>)

Sat, 10/20/2012 - 23:01 | 2907238 NoDebt
NoDebt's picture

Just means that when it breaks it's gonna break big and break fast. 

In '08 trust and confidence were the biggest casualties of the downturn.  They are unlikely to return by pursuing policies that further undermine trust and confidence.  I doubt I'm the only person here who rocked back in their chair when QE1 was announced. I recall thinking something like.... "Damn, we got one government agency buying the debt of another government agency!  That's crazy!" 

No, son.  It's not crazy.  It's Japan.

I just doubt whether the US can pull off a Japan scenario.  Maybe we can.  Japan was #2 in the world and they pulled it off.  Maybe 'ol USA #1 can as well.  Somehow I think there is a "critical mass" to this sort of thing.  Something that can only happen if there's someone bigger to focus on who isn't in the same situation.

But that's what The Fed is shooting for.  It'll work, too.  Right up until it doesn't.  So everyone sit very VERY still and don't rock the boat or it might capsize.  Auditing The Fed would definitely count as "rocking the boat."  So would a lot of other events.  But auditing The Fed would be an "unforced error".  One we did to ourselves.  The broader world will provide plenty of "boat rocking" events without our help.


Sun, 10/21/2012 - 01:56 | 2907403 AGuy
AGuy's picture

"I just doubt whether the US can pull off a Japan scenario. Maybe we can. Japan was #2 in the world and they pulled it off."

I wouldn't say it worked for Japan, but Japan has too major important differences than the US:

1. Japan always runs a Big Trade Surplus (well until the March 2011 Earthquake and Nuke Plant meltdown)

2. Japan is a nation of savers. The US is a nation of debtors. Only a small portion of the US population isn't in debt.

The only think the US has going for it is that the US dollar is the worlds reserve currency, but that is not going to prevent inflation from becoming ugly. I think once Inflation gets out of control there will be no-off switch because the gov't simply owes too much debt to permit high interest rates required to stop inflation. Once Inflation takes off it will be a run away reaction until the dollar is worthless.

Currently we are in state of stagflation as wage growth remains weak and the job market remains stubbornly weak. Consumer prices are rising, especially in Food and energy. But just like the 1970's, Stagflation eventually morphed into high inflation.

Sat, 10/20/2012 - 23:02 | 2907246 swamp
swamp's picture

Banker whore Obama



Teddy Roosevelt: 3

Others Prior To FDR: NONE

Truman: 5 in 7 years

Ike: 2 in 8 years

JFK: 4 in 3 years

LBJ: 4 in 5 years

Nixon: 1 in 6 years

Ford: 3 in 2 years

Carter: 3 in 4 years

Reagan: 5 in 8 years

Bush 1: 3 in 4 years

Clinton: 15 in 8 years

Bush 2: 62 in 8 years

Obama: 140 in 3½ years!

Sun, 10/21/2012 - 03:32 | 2907442 Tinky
Tinky's picture

Complete, unadulerated crap. 

Do you always believe the daisy-chain emails that you receive from other idiots?

I'll assist you by shaving a few seconds off of the search that you should have done before regurgitating that nonsense:

Sun, 10/21/2012 - 03:44 | 2907448 bunnyswanson
bunnyswanson's picture

Yeah, what a dumbass.  He stated 140 EOs when it is actually 138.  Read your link.

Sun, 10/21/2012 - 04:47 | 2907463 Incubus
Incubus's picture

read the link.  looks like snopes just wrecked everyone

Sat, 10/20/2012 - 23:07 | 2907247 Yen Cross
Yen Cross's picture

 Here is a good "F/X" interbank chart, for tomorrow (premarket) open. It starts jumping about 2 hours before New Zealand markets open. and


Sat, 10/20/2012 - 23:41 | 2907280 q99x2
q99x2's picture

Great. Another 10 years of green shoots muddling through the new normal waiting for Greece to default.

Sun, 10/21/2012 - 00:23 | 2907314 RiverRoad
RiverRoad's picture

They're having a wonderful time living in denial over there which they can apparently do longer than the rest of the world can stay solvent.

Sun, 10/21/2012 - 00:19 | 2907310 RiverRoad
RiverRoad's picture

And what a delightful day that will be when the Fed sits down to eat their own cooking.

Sun, 10/21/2012 - 00:25 | 2907320 IridiumRebel
IridiumRebel's picture

Full Japanese Retard.


Sun, 10/21/2012 - 00:26 | 2907321 neutrinoman
neutrinoman's picture

Nothing at all, good sir, can prevent the Fed from buying all the debt in existence, even debt that does not yet exist. And anything -- anything -- down to my toenails, can be collateralized and rehypothecated.

Must-see article from Hoisington Advisors:

Sun, 10/21/2012 - 01:15 | 2907369 resurger
resurger's picture

God i love ZH!

Sun, 10/21/2012 - 02:25 | 2907419 helping_friendl...
helping_friendly_book's picture

Me too! Actual unfettered freedom in a forum of the informed.


Sun, 10/21/2012 - 03:42 | 2907447 poldark
poldark's picture

Me too!

Sun, 10/21/2012 - 03:47 | 2907449 poldark
poldark's picture

A great deal of equities are owned by the banks with government money. How much of the equity market can the Fed buy before shares are no longer liquid?

Sun, 10/21/2012 - 12:25 | 2907478 Radical Marijuana
Radical Marijuana's picture

Ouroboros of Incorporated Robbery!

See Walter Burien, et al., analyzing CAFR.

Agencies mandated by governments already own the vast majority of publicly traded shares!

That is an important concept to comprehend how totally incestuous the situation has already become. American history became the powers of "We the People" taken over through the application of the methods of organized crime, within the political process, so that a tiny group of the best organized criminals effectively control the powers of government, to use against the People. A tiny minority of interlocking money managers operate a system where they control things that are owned in the name of other people, and the collective governmental agencies, supposedly acting for the People, own just about everything already! The paradox is that the powers of We the People were used to rob the People, in their name, so that the People own just about everything, collectively, but actively control and direct how that is done less and less in the real world, while a tiny elite makes the actual decisions, and makes self-referential decisions regarding everything, because everything they do loops back upon them. They operate according to their numbers, although their numbers have become INSANE.

It is quite hyper-bizarre!  It is a Bizarro Mirror World!

The Fed buying up more and more things is merely the more of the automatic runaway of the systems that were already doing that for many decades before. Eventually, the answer to your question, I believe, is that there will be almost totally incestuous control of "trading." It was already headed that way, and is just becoming more plainly obvious more recently. The longer-term problem is the same as that with incest from a genetic point of view. The professional money managers end up enfeebled by the prolonged triumph of them staying within their own little world, talking to each other, and agreeing with each others' professional lies and hypocrisy.


My usual song and dance at this point it to pray out loud, so that I can be overheard (Hah!) that the People would stop being political idiots, and understand that their money system is backed by their murder system, which they gave their power to. Their power was covertly taken control of by those who were the best at being dishonest, and backing that up with violence. The organized crime at the center of government ends up directing the power of We the People. Meanwhile, the People mostly understand almost nothing about that, but tend to believe everything to be backwards to the way it actually is, and continue to call for "solutions" that are backwards, and utterly impossible to ever be implemented. The point is that everything is based on the power to rob, backed up by the most extreme form of that, which is the power to kill. The failure to understand that, but rather to be brainwashed to believe in bullshit that that is not always the case, has enabled the best professional liars and immaculate hypocrites to insulate themselves into a rarefied world, where they effectively control the power to rob, and thereby control the economy, which IS actually based on the power to rob. Professional money managers have reified fantasy views of the world, by living within that fantasy world almost exclusively.

More than 90% of the public economy is ALREADY owned by the public, because the public power to rob was directed for decade after decade to do that! The Fed is just doing that more than ever before! There is practically NO "equity" market left. The "equity" market has already been almost totally taken over by the power to rob. Indeed, there NEVER was any "equity" market that was not based on the context of the surrounding power to rob, backed up by the power to kill!

The answers to your question get reflected an almost infinite number of times, as the hinges of the economic Bizarro Mirror World are more and more bent, so that they reflect their own reflections!  (I.e., look into a set of mirrors, with hinges, so that one peers into the space between those mirrors, as one swings them closed, to face each other. As one does that, they generate more and more reflected images of each other, until, IF one could see into them being finally closed, there would become infinite reflections of themselves, sealed away in their own Bizarro Mirror World.)

A tiny group, through being secretly the best at fraud and robbery, took control of the public powers of governments, to enable more and more runaway fraud and robbery. That has resulted in governmental agencies accumulating more and more ownership of more and more of the total economy, faster and faster. The Fed is merely doing more of that now, faster and more obviously than ever!

There is NO good way out, other than for We the People to understand what is really going on, and to use more information and higher consciousness, to take responsibility for it. Unfortunately, that appears to be like praying for a series of political miracles!

IF there was a series of political miracles, then the People could understand that they already collectively own, and are already responsible for almost everything. However, the heart of that political miracle would require them to understand and accept that the entire economic system is based on robbery, backed by murder. That would require profound paradigm shifts in the ways that the People THINK. It would not actually change the reality all that much, since the reality ALREADY IS THAT.

The Ouroboros of Incorporated Robbery has already resulted in most of the shares of the biggest banks being owned by governmental agencies, in the name of the People, scattered and fragmented across the country, and indeed, across the entire world. There are awesome tremendous ironies in the extent to which the biggest bullies' bullshit social stories have become so triumphant, to become an almost total Bizarro Mirror World, staring back at itself, repeating it own lies to itself ...

The economy of the USA is already operated by an elite of money managers, isolated more and more inside of their own fantasy world, using the public power to rob the People, in a runaway insanity, powered by the People. Since the USA dominated the rest of the world so much, for so long, that Bizarro Mirror World system, the result of triumphant runaway frauds, backed by force, is now the overwhelmingly dominant system directing the whole world. So therefore, repeated again on a global scale, is the problem that the actual money/murder systems are being directed by elites, whose only qualifications were that they used to be the best at being dishonest, and especially good at lying to themselves and each other!

Anyway, poldark, your one sentence and one question, I BELIEVE, leads on to the discussion above, and my attempts to point out how much more pervasive is the point made in your first sentence, and therefore, how much more profound is the attempt to answer the question in your second sentence ...

Sun, 10/21/2012 - 09:51 | 2907582 hedgehog9999
hedgehog9999's picture

Hunt briohers come to mind.....

Sun, 10/21/2012 - 05:40 | 2907475 OldPhart
OldPhart's picture

I'm probably the dumbest dumbass here.

I don't trust the banks to hold my money, and I want a safe way to save throughout the year.  If I try to secrete a few bucks each week to grandma's safe I'll wind up raiding it to buy beer.

To me the safest way to accumulate a modest nest egg that would be too intimidating to raid, once received in cash, is to increase my federal income tax withholdings.

I know it sounds ridiculous, because we have raging inflation on food and energy, but how else can you safely save in today's environment?   We have effectively 0% return on savings.  My 401k schleps along with winners/losers that break even and I am forbidden by plan rules to even take a loan on now.  But I'm going to need to get a new car in the next year and I refuse to even think of giving money to a financing company.  So I've increased my withholdings...a lot.

I've also claimed 99 dependents on my W-4 for both federal and state...since I live in California where there is significant risk of getting a timely, let alone any, refund.  dong this allows me to legally minimize the amount at risk from the theiving bureaucracy of California and to define the expected federal refund/overpayment.

I've noted over the last four years that the fed issues their check WEEKS in advance of California.  And the fed govt has the presses to make the check good.  Filing in February means I have enough dough on hand to pay the fucking state as required.

This may also be the dumbest thing I ever did, but I think it will pay off in the future.  I claimed no deductions last year for fed or state.  Yes, I had mortage interest and medical, donations, etc.  But I expect that the tax auditors over the next twenty years are going to be vastly expanded.  I will have nothing but credits due to me, not that I expect to see that happen, and will not have to fear seizure of banks accounts, etc from the state or IRS.  Also, if things don't go as I expect in our new police state economy, I can refile and claim the credits.

While today this seems folly, I'm not about to put my money into the market or a bank.  What I have on hand is cash (not to mention metals from lead to gold) with a minimum in the account for online/debit purposes.  My rate of return is 0%, I have no risk...other than flareup of hyperinflation and then I can change my withholdings again.

You smart traders and investors.  Please feel free to critique and convince me I'm wrong.  Just don't tell me to put money into the market.

Sun, 10/21/2012 - 13:08 | 2907865 helping_friendl...
helping_friendly_book's picture

Sounds like a bad idea. You only have three years to file an ammended return, I think, and then gone. If you have deductions take them and get your money.

Might I suggest a savings account with the Bank of China on Madison Avenue in NYNY?

It is, kind of, a pain in the ass to open an account. It takes notirized copies of your identification and such. It takes a week or so.

I linked my credit union account to transfer money , which is deposited into a US Dollar denominated account. Then I can transfer money to a reminbi (Yuan) chinese currency account.

To make a withdrawl you can: 

Go to the branch

pay $40 transfer fee  to transfer your money by wire back to your bank

Pay a $5 fee to mail you a check which would, probably take ten days.

It is not easy to get your money but, you can get to it within a week and the money is not going anywhere.

The account is even FDIC insured up to $250,000.

I made 2% by arbitrage plus the 0.1% in interest this year. 

I have made 9.25% by arbitrage since 2009. If the rmb and dollar go to parity I'll make 600% by arbitrage and I think it would be tax free, not capital gains since I would get a 1099 only on the interest which isn't peanuts.

Check it out:

It might solve your problem since the account is liquid but not easy to get to unless you live in Manhatten.

Sun, 10/21/2012 - 22:13 | 2908764 OldPhart
OldPhart's picture

I appreciate the thoughts, however you're suggesting I put money into a bank...and one that is in New York?

NO!  Thank you very much.

The safest holding agent at present seems to be the, at least until the dollar bursts, then they'll switch to some other system and my money would returned in that currency. 

A bank/financial institution, any one of them, has the power to vaporize third party money with impunity at any given moment.  I will not keep more than a token amount in a bank.

I also subscribe the 'if it's not in your hand you don't have it' view.  Any insignificant hiccup these days has the potential to lock up all banks just at a time that I would want my cash the most.

Sun, 10/21/2012 - 06:43 | 2907488 falak pema
falak pema's picture

In this financial debt tsunami race to bottom between different segments of first world, other posters here highlight the madness of ECB printing. The impossible political structures of Euro group going from one incoherent centrally planned gridlock to another, and the dichotomy of the Euro currency structure to arbitrate between the north south euro models without fiscal harmony or similar governance models...

On the other side of the pond, the current political deadlock and incoherent DC autism to fiscal issues is highlighted here : 

The Political Black Swan - Business Insider

So it looks like a race to bottom is in deadly earnest between Tweedle Dee and Tweedle Dum; to whom shall be given the wooden spoon prize of top dunce in the first world... 

Sun, 10/21/2012 - 08:18 | 2907505 Griffin
Griffin's picture

Icelanders had a referendum yesterday to decide if they wanted to replace the old constitution with a new one.

The results were that the majority wants a new constitution.


There is a rather large cluster of earthquakes taking place in the N-E part of Iceland, close to a place called Siglufjordur.

almost 300 quakes in this area so far. The biggest one 5,2.

This is taking place in a area called Tjornes fracture zone, there is no volcano close to the center of activity.

Sun, 10/21/2012 - 08:24 | 2907518 laosuwan
laosuwan's picture

So far the strategy has failed for the simple reason that the smart money instead of being "herded", has far more simply decided to just front-run the Fed thus generating risk-free returns,


Not at all, the strategy has worked perfectly. It would be wrong to assume that ALL these people are stupid PhD lemmings. They are some of the brightest finance people around and they are pumped up on their self and have become like a priesthood that justifies their actions to themselves like Orwell's doublethink concept. These people know it is mathematically impossible to solve the debt crisis, that a collapse is inevitable. But the also know there is a window of opportunity to steal as much as possible before the house of cards folds. That is what QE is about; making themselves richer while using electronic money to buy debt and convert that money into real assets while the selers still accept the money. The final plan most logically is to capture enoughof this debt they can simple forgive it (not pay it o themselves) and I posted this here two years ago. You can be sure they have an exit plan.


As for the stock market, its all QE money and has been for a while now. Some day we may learn that its been much more than just stocks. Knowing all this one would be crazy to hold bonds of any kind, or stocks. Why? becasue although in the short run you can ride the upwards tide, unlike them you dont know what is the date they plan to throw in the towel.


Right now, I dont see many ways to make money safely but agricultural and prime commercial real estate and gold look pretty good for preserving money. Opportunities for buying will be plenty when the time comes.

Sun, 10/21/2012 - 12:35 | 2907834 Radical Marijuana
Radical Marijuana's picture

Correct! ... priesthood that justifies their actions to themselves like Orwell's doublethink concept ... window of opportunity to steal as much as possible before the house of cards folds.

Sun, 10/21/2012 - 08:31 | 2907522 pismo10
pismo10's picture

This states that the fed has monetized 20 trillion dollars already. This is not true.

The zerohedge negative bias is going a little far this time.

Sun, 10/21/2012 - 10:22 | 2907616 Tyler Durden
Tyler Durden's picture

This states that the universe of debt which the Fed is eligible to monetizing is ~$20 trillion. This is absolutely true. It is also expanding.

Sorry if reality is a little too negative sometimes.

Sun, 10/21/2012 - 10:42 | 2907625 pismo10
pismo10's picture

You state clearly the fed has monetized everything under the blue arrow, 20 trillion. Absolutely untrue. Anything for drama I guess..true or false.

Sun, 10/21/2012 - 11:54 | 2907764 Tyler Durden
Tyler Durden's picture

Apparently in your pursuit of high drama, you are quite oblivious to the actual facts. What was actually (as in true, not false) and "quite clearly" said in the article is this:

"the Fed is already engaged in the monetization of virtually everything to the right of Municipal debt (under the blue arrow in chart below)."

Better luck in the reading comprehension department next time.

But wait, there's more!!!

Since when it comes to frontrunning the Fed all that matters is expectations, which in the case of the blue arrow have been very clearly indicated, it is absolutely true that from a discounting point of view (you know, as in what the markets actually do), everything under the blue arrow has been effectively monetized unless the Fed says otherwise, which it won't because as the article also clearly states that would lead to a market crash.

Sun, 10/21/2012 - 12:43 | 2907844 YouAreBliss
YouAreBliss's picture

Right on Tyler!  And this does not take into account the backdoor monetization of driving all asset classes higher, especially equities, and the Government funding through cap gain taxes on these artificial gains.  Romney's plan for 0% cap gains would defeat this transfer mechanism.

Sun, 10/21/2012 - 08:37 | 2907531 f16hoser
f16hoser's picture

Can't the stupid Sons-of-Bithez wait 'til after the Super Bowl?

Sun, 10/21/2012 - 12:25 | 2907807 YouAreBliss
YouAreBliss's picture

Outstanding article.  With the PBOC doing the Feds job, of buying dollars to stop it from falling, the Fed is unshakled to print and monetize at will.   Until they stop....then the shit. hits the fan.  Romney's playing with fire here.  If China throws in the towel and`s game over.


Sun, 10/21/2012 - 13:35 | 2907910 helping_friendl...
helping_friendly_book's picture

Would this cause the reminbi to gain value against the US dollar?

The rmb:usd is about 6.25:1 respectively.

If the PBOC hits the dump button on their remaining treasury holdings, between 1 trillion and 1.5 trillion wouldn't this cause the ratio to move toward parity?

The Chinese signed a trade agreement with Germany last year for 50 billion Euro. This indicates, to me, they Chinese are shifting their reliance from the usd trade to other currencies.

What is your opinion youarebliss?

Mon, 10/22/2012 - 00:37 | 2908884 YouAreBliss
YouAreBliss's picture

All schemes of this nature eventually collapse - take John Law's Mississippi Scheme.  How did that end?  Not so great!

Think Japan Inc 1989.  This was more orderly, in Yen appreciation, as we were much more solvent 25 yrs ago.  And the trade gap with them was thwarted, somewhat, by Reagan's Auto import limits.  This actually sowed the seeds for today's southern auto industry (booming today).  Japan was also an ally.  

With China it will be very quick, like a dam breaking.  IMHO.

And their regurgitation of our Treasuries will be followed and amplified by every hedgie with leverage, causing a massive catastrophic spike in rates.  Game over!

This is the fatal trap the Fed has created.  At that point they have only one choice - emergency interest rate controls coupled with capital export controls, then gold confiscation.

This gives them time to "restructure" the dollar - basically issue a new currency.


Meanwhile China will freak out and respond with a military action to preserve political leaders.  Most likely Taiwan, which the world will not care to much about while dealing with the massive financial mess the collapse of the world's reserve currency will create.

This will cause a quick war with the US, which they will lose.  US reemerges as the unchallenged super power, with carte blanche to create a new world financial system.  Bush's NWO.

Mon, 10/22/2012 - 21:17 | 2911326 helping_friendl...
helping_friendly_book's picture

*This will cause a quick war with the US, which they will lose.*

You must be smoking crystal if you think the US can defeat China.

I ain't trying to bait you dude but, I have had dinner with Chinese fighter pilots in Chengdu and witnessed the Chinese peoples love and respect for their Army and I must say I disagree.

The Pentagon knows they can't take on the Chinese. We are 16 trillion in debt and the Chinese own 1 to 1.5 trillion in Treasury bonds. The Chinese could dump 1.5 trillion and hardly notice it. Their economy is bigger than ours and they are not in debt. 

I have been to China twice and will return on December 21st, 2012 provided end of the Baktun doesn't end the world. Their economic power strikes awe in me when I go back and see the difference made in just two years. I expect to see more cars, more subways, more cranes, more middle class as ours shrinks. Their new Premier will be announced shortly after our election and I expect a change in posture toward the USA as Wen Jiabo retires and the new leader makes our President bow even lower when they meet.

We tried to fight the Chinese in the 1950's and I don't know if you've noticed but, NOBODY talks about it because the Chinese volunteer army drove us back to the 39th parallel where we remain to this day. I don't hear anyone bragging about that one. They threw a million man volunteer army across the Yalu river without a second thought and would have fought to the last man. We are fortunate we can retreat in such an orderly fashion.

Noone knows this but, Henry Kissenger brought a tonne of gold bars with him to get the first meeting between Mao and Nixon. 

China will throw a 5 million man army at anyone that dares to threaten their territory without a second thought. We are just lucky their Imperialistic goals are limited to Africa and not the Americas.

Not trying to provoke you. I was just asking a simple question on your thoughts about the result if China stopped pegging the Yuan to the USD?


Sun, 10/21/2012 - 12:23 | 2907819 YouAreBliss
YouAreBliss's picture

Outstanding article.  With the PBOC doing Feds job, of buying dollars to stop it from falling, the Fed is unshakled to print and monetize at will.   Until they stop....then the shit hits the fan.  Romney's playing with fire here.  If China throws in the towel and`s game over.


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